A Big Week For Google's 'Programmatic Direct' Dreams

Last week it struck two private exchange deals with Time Inc. and the 42-member Local Media Consortium. Google will support programmatic direct sales for these sellers and provide wider access to their quality inventory for global media traders such as trading desks at Publicis Groupe's Vivaki AOD or WPP Group's Xaxis.

Bonita Stewart, an eight-year Googler currently serving as the company's VP for partner business solutions in the Americas, is a key executive realizing these sell-side deals. She spoke with AdExchanger.

AdExchanger: What's your role at Google today?

BONITA STEWART: About a year and a half ago I was asked to lead our publisher side of the business, our partner business solutions for the Americas. I've had responsibility for all monetization products across search, mobile, video and display – and the Ad Exchange, which is our favorite child right now.

What is happening with the Local Media Consortium and Time Inc. deals?

We've been working with publishers since the company was founded. Last year we shared $9 billion with our publisher partners. Digital growth is proving that technology can help publishers improve and grow their business. That's what we're seeing across all our platforms, whether that's AdSense, DoubleClick For Publishers or Ad Exchange.

With programmatic taking off, what we're now seeing is the influx of premium inventory as part of the programmatic equation. For advertisers as well as agencies it opens up a whole new opportunity to have real-time marketing available to them.

The private exchange idea is becoming more widespread, perhaps aided by greater advertiser assistance. What dynamics do you see?

The private exchange, when it comes to brand, allows more flexibility for many premium publishers. What we've seen with one of the areas we call our Custom Exchange is the opportunity to connect the buyer with this premium inventory. We've seen many advertisers and agencies drawn to the opportunity to do something more custom.

How do these deals come together? Does a company like Time Inc. bid this out to a range of sell-side tech companies and Google competes on those RFPs?

The business process varies, but I will say we have relationships with many premium publishers. And some are utilizing more aspects of our different products. We're seeing a trend toward a unified platform, with the recent upgrade to our DFP premium product that allows publishers to look at inventory across all streams, all devices – looking at mobile, video. We have very close relationships.

How did the Local Media Consortium deal come about?

Consortiums take time. There are a number of partners that are involved. We spent a great deal of time working with them on understanding their strategy, their goals in terms of what they were trying to accomplish, and also showing the efficacy of our platform across devices. I think it's important to provide the Consortium with a platform that will evolve. With newspapers – whether it's moving consumers from a laptop to a mobile device to a tablet to launching more video – they want to understand how our platform can facilitate all devices across devices and formats.

Can you be more specific about the frequency of Custom Exchange deals? How many are you doing that aren't being announced?

I can't get more specific, but there is demand. With the Local Media Consortium, that was 800 daily newspapers, 200 broadcasters. One of our Canadian publishers tells us they're seeing more revenue from CPMs that are greater than $50 than those that are under $2. We're also seeing double-digit CPMs on our exchange, and they're increasing by nearly 20% over the past year. We are seeing greater receptivity to bringing on more premium inventory to the exchange.

Are deals like this about enabling publishers to do guaranteed programmatic deals directly with advertisers, or is it about enabling demand through the exchange from any demand source?

I think it's enabling demand. We've seen impression growth on the private exchange double every quarter for the past year. That's creating a tidal wave of interest across the publishers. When you have the agencies and advertisers interested in conducting this business this way and knowing they have opportunity to do that with our ad exchange across all types of inventory is quite appealing.

One thing about the Time agreement is it's global. There's the opportunity to not only operate within the US, but to work with a company such as Google that allows our global footprint to facilitate larger deal sizes.

Is it getting more important for ad platforms to engage directly with publishers?

Today you see the back room, which is ad technology, coming to the forefront of marketing. That requires understanding strategy, and getting very close to the publishers. Also, they're in quite a bit of transformation. We are familiar with transformation, and so we can assist our publishers in developing strategy.

We believe the publisher relationship has always been important for Google. More importantly, we believe in the value of the partnership.

You will see more announcements around how we are working with publishers, how we are connecting the demand and the supply, how we are driving incremental value for publishers and how effectiveness of our technology will deliver to the bottom line.

What about programmatic transactions around "native" ad formats? Does Google have a play there?

Yes, we do. I won't go into all the details, but we are focused on the evolution of native. What I will say is we are working closely with the publishers to understand their objectives for native, how we should facilitate that within our technology.